How to build a holiday-proof supply chain with the Internet of Things

This Valentine’s Day millions of people will expect the flowers, chocolates and other gifts they have bought for their loved ones to arrive at their doors on time, and in one piece.

Whether for a special occasion or when making everyday purchases, customers today expect rapid and reliable delivery of their online purchases. In most cases, it’s safe to say, they give little thought to how demand for more products at lower cost and on tighter deadlines is putting pressure on the supply chain.

Under these conditions, the onus on businesses has risen dramatically and the potential cost of a shipping delay has never been higher. According to this year’s Allianz Risk Barometer, business interruption and the supply chain are the top risks occupying the minds of UK companies in 2015.

>See also: Gartner's Internet of Things predictions

To add to this, with online spend on Black Friday exceeding estimates by over £250 million last year, and the Christmas season also breaking online shopping records, companies are realising they must take every measure to optimise their supply chain for speed, accuracy and cost so they can avoid interruptions and deliver on customers’ expectations.

The Internet of Things (IoT) will play a large role in helping businesses achieve this. Gartner recently forecast that 30 billion devices will be connected to the internet by 2020, and the implications of this trend for the supply chain are dramatic.

The IoT promises new standards of control, efficiency, transparency and compliance – the key performance indicators of a successful supply chain. With sensors collecting relevant data at a near-limitless number of points along the supply chain, companies will be able to track and manage their goods and how they’re shipped in real-time. As a result, they will able to work more accurately and cut down the cost and risk associated with transporting and distributing products.

The IoT allows companies to collect a great deal of information about goods travelling along the supply chain and feed it through to all parties involved, which means they can keep a watchful eye on a products’ progress and make any necessary adjustments with minimal delay, even whilst a delivery is in-flight.

For example, tracking to what extent goods might be subject to vibration, temperature and humidity fluctuations throughout their journey will give companies insight into which points in the supply chain present the greatest risk for product degradation. 

In much the same way, and with a real-time view into granular location data, businesses can instantly see where and when goods go off their planned trajectory. As well as allowing for more immediate responses to current disruptions, this information will also help supply chain managers to plan and adapt their transport strategies to avoid similar situations with future shipments.

Sensors on products in transit will also allow businesses to measure and record angles of inclination – the degree to which an item has shifted with respect to its axis. In the case of products such as flowers or fragile produce, whose physical integrity is inherent to their value, being able to monitor and quickly address any potentially damaging situations becomes very helpful.

Thinking more proactively, by compiling and analysing sensor data from previous shipments, companies will be in a position to select optimal shipping routes for their products and avoid roads or handlers that are more likely to damage their goods.

The IoT will also help companies improve shipment speeds. Continuous updates on the real-time location of goods will allow them to easily determine a product’s dwell time –how long it remains idle in transit.

A closer look at this data will help supply chain managers identify chokepoints and rethink their shipping routes accordingly. To add to this, once universal standards for IoT data are established, seamless sharing of this information among supply chain partners will allow any shipping exceptions to be handled deftly by the appropriate party. For example, if a shipment arrives later than expected, individual parcels can be reassembled using different carriers to help distribute the load and speed up delivery.

The rise of the IoT will also promote improvements in the earliest stages of the supply chain. Companies will be able to use the abundance of data at their disposal for more sophisticated scenario planning. They will benefit from increasingly detailed data analyses to better manage their supply chain, incorporating a wealth of timely, granular and accurate information that has until now been unobtainable.

>See also: Is the Internet of Things already getting ahead of enterprise security?

This will help businesses avoid the dangers of less-focussed data aggregation that can result in poor planning and execution – an issue that many supply chain practitioners will be familiar with. It will also allow for increased segmentation, both of individual customers and of the supply chain that serves them.

How exactly companies adapt to the Internet of Things remains to be seen, and will depend largely on their individual expectations from the technology. However, one thing is clear already: its impact on the field will be big, and the time for supply chain practitioners to put some thought into their IoT strategies is now.

With a strong framework in place for how they will make the most of widespread sensors and analytics tools across the supply chain, businesses will be primed to bring their plans to life quickly and effectively – and make sure everyone gets their flowers on time.


Sourced from Dominic Regan, Oracle

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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